How To Spot A Fake ICO

ICO is a combination of blockchain and crowdfunding. We can basically divide ICOs into three main categories: ICOs that are essentially donation crowdfunding, ICOs that are basically reward-based crowdfunding, ICOs that significantly develop finance. There are several different things to be taken into consideration before an educated purchase of ICOs that is done by sending either Bitcoin or etherium or any other means of purchasing coins. To launch ICO services, foremost take a look at their team, take a look at the online presence, are they on LinkedIn, do they have relevant experience. For example are they just the coders who have been doing it for a year or do they have someone who’s a veteran that has prior blockchain startup experience.

Look at whether or not they engage with the community some of these projects have a slack channel, and they’re very engaged in the community some of them are active on their Reddit page, it’s a huge red flag if they are completely closed off or if they don’t answer any of the questions.

The second thing to do is to dive into the standard online material that all of these ICO startups are putting out, and one is the code on Github if you can understand it try to see if it’s cloned from another existing project if it is, then is likely to be a scam.

Read their white paper which is where they write their technical specifications and if you can’t understand that though type in the comment and then review may go on, and there someone else read the white paper and gives the answer to your questions.

Go to their website and see if they have a roadmap available if they do see how likely it is that they hit that roadmap. Based on your educated guess take a look at the different media sources have been talking about them. If the website contains buzzwords but doesn’t tell you anything in addition to that, those are red flags.

If the company and what they’re trying to do requires a blockchain requires this centralization a lot of them try to force the blockchain technology onto what they’re trying to do.

Another thing you want to do is to see what stage they’re currently at, do they have a product and testing or do they have a product already out in the market.

Finally, take a look at their competitors see how likely it is for them to get market share with their new spin on similar products and services and see where they fit.

One thing to do is to research whether it’s inflationary or deflationary by that I mean do the number of tokens out there steadily increase over time in which case your coins can become worthless over time potentially.

Take a look at the purpose of the coins how do they let you interact with the product or the service.

The last thing to ask is how much money are they looking for because a lot of criticism out there is that people set their ICO capitals to be high or uncap and they raise like hundreds of millions of dollars for basically an idea stage software startup.